Look, Read, Understand, Apply




E-commerce: is the process of buying and selling good and services online. Website is the primary interface between seller and the customer; sellers publish information about the services and products on the website; customers surf the website and find information about the product and purchase products if they liked it.
The website of the e-commerce business provides features like search product information, order products, purchase products, view other customers comments and feedback about the product; picture gallery, video of the products etc. are also provided.
Customers can pay online for the product or they can provide cash on the delivery of the product. In case of Nepal, digital wallets, bank debit/credit cards, IPS connect are the major online payment methods. Digital markets are said to be more transparent than physical markets. The information asymmetry, search cost, transaction cost, menu costs are low in digital market. The sellers can easy change the prices of cost based on the market conditions.

Digital goods

Music, movies, books, software can be delivered over a digital network are considered as digital goods. The cost of delivering digital goods is extremely low.

Features of e-commerce

The unique features of e-commerce are:
  • Ubiquity
  • Global Reach
  • Universal technology standards
  • Richness
  • Interactivity
  • Information Density
  • Capabilities for personalization and customization
  • social technology

Principal e-commerce business and revenue models:

E-commerce business models are:
  • e-tailers
  • transaction brokers
  • market creators
  • content providers
  • community providers
  • service providers
  • portals
E-commerce revenue models:
  • advertising
  • sales
  • subscription
  • free/freemium
  • transaction fee
  • affiliate

Transformation of Marketing

The Internet has eased marketers to identify and communicate with numerous customers at a very low cost. The concept of crowdsourcing has helped to use the wisdom of the crowd and learn from the customers to design products, improve marketing, increase customer value. Websites have eased to place banners, rich media, and video ads; Social media networks have helped to spread information to a huge group of people very easily and also eased sharing of point of views of individual customers.

Business to Customer E-commerce

Business organizations publish information about their products and services on the Websites; they do marketing of their website also. Customers visit those websites, get information about the products and services; if they liked the product then they purchase it.
The websites have features to search products, compare products, view customers' feedback, purchase product, order product, write comments. The website provides a view of products from different angles also.
In the case of B2C eCommerce, sellers (business organizations) directly come in touch with the customer and customers can directly trade with the sellers. This scenario helps to remove the broker and commission of the broker; this can result in a reduction of the cost of the product. Customers can help/serve themselves in finding information, purchasing products, tracking the product, etc.
The business organization securely stores all the transaction data, takes sole responsibility for protecting customers data in most of the cases.

Customer to Customer (C2C) ecommerce

Customers put advertisements of their products/ services on a website (majorly third-party marketplaces). They provide their contact information also. Other customers view the website and find the products, and if liked they directly purchase the product from the customer.
Here, the website may take some charge with the seller or with both seller and buyer as it has facilitated the transaction. The third-party website can also provide a payment facility to the buyers.

Building eCommerce presence

E-commerce is not only about doing trade using the website or just publishing website; integration with social media networks, use of mobile applications, affiliating with other both online and offline channels are vital tasks performed to build a strong eCommerce presence. There are two most important management challenges with building strong eCommerce presence:
  1. developing and having a clear understanding of the business objectives,
  2. deciding the right technology to achieve the objectives.

Components of a website budget

  • Hosting Service -- 10%
  • Telecommunications -- 5%
  • Software -- 10%
  • Content Development -- 15%
  • Design -- 30%
  • Marketing -- 20%
  • Hardware -- 10%

Ecommerce website should have

  • Digital Catalog
  • Product database
  • Customer on-site tracking
  • Shopping cart/payment system
  • Customer database
  • Transaction Database
  • Email server
  • Site tracking and reporting system
  • Inventory Management System

Electronic Data Interchange (EDI)

Exchange of data in the standard format between computers without any or minimum human intervention.